IQ and the Wealth of Nations

[Dromikaites]

Here's a very interesting article about the correlations between the average IQ of a population and the prosperity of a country.
http://www.rlynn.co.uk/pages/article_intelligence/1.asp

In short, that study found a strong corelation between the average IQ and prosperity. Yet there are exceptions: some countries that do much better than the average IQ of the population would predict and some do worse.

Here's author's interpretation of those exceptions:

The regression analysis suggests that a major additional factor is the economic form of organisation consisting of whether countries have market or socialist economies. The countries that have the largest positive residuals and therefore have higher per capita income than would be predicted from their IQs are Australia, Belgium, Canada, Denmark, France, Ireland, Israel, Qatar, Singapore, South Africa, Switzerland and the United States. With the exception of Qatar and South Africa, all of these are technologically highly developed market economy countries and their higher than predicted per capita incomes can be attributed principally to this form of economic organisation. Qatar's exceptionally high level of per capita national income is principally due to its oil production industries. South Africa's much higher than expected level of per capita income should probably be attributed principally to the cognitive skills of its European minority who comprise 14 per cent of the population.
The countries that have the largest negative residuals are China, Iraq, South Korea, the Philippines, Romania, Russia, Slovakia, Thailand and Uruguay. Four of these countries (China, Romania, Russia and Slovakia) are present or former socialist countries whose economic development has been hampered by their socialist economic and political systems. After the collapse of the Soviet communist systems in 1991 and the introduction of market economies in these countries and in China, the prospects for rapid economic development for these countries are good, although it takes time to establish effective market economies. Of the remaining five countries with large negative residuals, Iraq's low level of per capita national income is due principally to the destruction inflicted in 1990 war and the UN sanctions imposed in 1990. South Korea's Real GDP per capita is also considerably lower than expected on the basis of the country's exceptionally high level of national IQ (106). The principal explanation for this is probably that South Korea had a very low per capita income at the end of World War Two as a result of military defeat and occupation by the Japanese and that it has not yet had sufficient time to achieve the predicted level of per capita income, although economic growth in South Korea since 1950 has been extremely high (see Appendix 2). The Asian economic crisis in 1998 may have increased the negative residuals of the Philippines and Thailand temporarily. Economic growth in Uruguay has been strong since the 1970s, although the country has not yet achieved the per capita income level expected on the basis of its relatively high national IQ.
Thus our general conclusion is that national differences in the wealth and poverty of nations in the contemporary world can be explained first in terms of the intelligence levels of the populations; secondly, to some extent, in terms of whether they operate market or socialist economies; and thirdly by unique circumstances such as the possession of valuable natural resources like oil in the case of Qatar and trade sanctions imposed on Iraq.

If I'm looking at the list of the European countries more carefuly I think that the explanations are too sketchy. For instance Belgium, Denmark, France, Ireland and Switzerland are doing comparatively better than UK, Germany, the Netherlands, Spain or Italy because the later do only as good as their IQ level would predict. Why would that be? What do you think are the "top performers" doing better than UK, Germany or Italy?

[Tom Paine]

"South Africa's much higher than expected level of per capita income should probably be attributed principally to the cognitive skills of its European minority who comprise 14 per cent of the population." Great line, and I mean, saying that of South Africa, a nation that only got out of apartheid about 15 years ago (if that).

And here we have the obvious statement of the year award: "secondly, to some extent, in terms of whether they operate market or socialist economies; and thirdly by unique circumstances such as the possession of valuable natural resources like oil in the case of Qatar and trade sanctions imposed on Iraq." Socialist economies have a hard bjob competing with capitalist countries, in part because the capitalists won't import much from them if it is avoidable; and natural resources, well look at Saudi. Natural resources are an economic boost especially when they are a rarity.

[Last_Crusader]

Let's not forget that schooling costs money. A richer country can afford better education, which bolsters the average IQ of its populace to some extent. High average IQ is not always a cause of riches, but money can be a source of learning.

[Dromikaites]

"South Africa's much higher than expected level of per capita income should probably be attributed principally to the cognitive skills of its European minority who comprise 14 per cent of the population." Great line, and I mean, saying that of South Africa, a nation that only got out of apartheid about 15 years ago (if that).

I think this has nothing to do with racism if that's what you imply. If the European minority is still running most of the businesses then the European minority is responsible for most of the GDP...

And here we have the obvious statement of the year award: "secondly, to some extent, in terms of whether they operate market or socialist economies; and thirdly by unique circumstances such as the possession of valuable natural resources like oil in the case of Qatar and trade sanctions imposed on Iraq." Socialist economies have a hard bjob competing with capitalist countries, in part because the capitalists won't import much from them if it is avoidable; and natural resources, well look at Saudi. Natural resources are an economic boost especially when they are a rarity.

The only trade embargo against the socialist (=communist) countries was one to prevent them from accessing high tech that can be used for military aplications. Romania had no complaints about being prevented from exporting to the West. The only problem (and we were not blaming the West for that) was only a few products were up to the quality demanded by the western customers.

[Dromikaites]

But why do you think France's GDP is higher than the one predicted by the IQ level while Germany's GDP is in line with the IQ level? To me it looks the countries where the GDP is higher than the IQ do something better and I'm curious what do you think that is.

[Tom Paine]

I think this has nothing to do with racism if that's what you imply. If the European minority is still running most of the businesses then the European minority is responsible for most of the GDP...

I know it has nothng to do with racism. It is just quite funny/ironic. And I think actually it has to do with racism, the apartheid of the system: the Europeans always had better education.

The only trade embargo against the socialist (=communist) countries was one to prevent them from accessing high tech that can be used for military aplications. Romania had no complaints about being prevented from exporting to the West. The only problem (and we were not blaming the West for that) was only a few products were up to the quality demanded by the western customers.

Precisely. Plus, of course, Russia started trying to be entirely isolated (US-Style) and then realised they couldn't do that. Repressive governments do not create good economic systems. And I did say, "in part"; importing from "communist" nations in the Cold War wasn't exactly a good move financially for people.

[Simetrical]

Remember, it could be argued that IQ tests are culturally biased: that they reflect an ability to do things that Westerners tend to do, but Bantu tribesmen do not. For instance, most very poor people don't go to schools, as has been pointed out, and schools exercise our abstract-thought capabilities much more than skinning an antelope or planting rice fields. But even more than that, as you move past a subsistence economy, more and more jobs involve the sort of stuff IQ represents: thought instead of physical labor. It's not really possible to control these figures so as to draw any meaningful conclusions from them.

[Dromikaites]

Remember, it could be argued that IQ tests are culturally biased: that they reflect an ability to do things that Westerners tend to do, but Bantu tribesmen do not. For instance, most very poor people don't go to schools, as has been pointed out, and schools exercise our abstract-thought capabilities much more than skinning an antelope or planting rice fields. But even more than that, as you move past a subsistence economy, more and more jobs involve the sort of stuff IQ represents: thought instead of physical labor. It's not really possible to control these figures so as to draw any meaningful conclusions from them.

The data that intrigued me are from Europe, where the IQ tests are relevant. Let's take a look at Ireland and UK: a lot of shared history and yet Ireland's GDP per capita is higher than the average IQ level would predict. And Ireland is not richer in resources than UK. UK even has oil in the North Sea.

[Simetrical]

Europe isn't necessarily relevant either. Ireland could easily have fewer people working in "intelligent" jobs than the U.K., surely.

[Dr Zoidberg]

This is rather topical down here in Aus at the moment. A uni academic stated that a number of African refugees should not have been gratned permanent asylum in Australia as their lower IQs would lead them to a life of crime and civil disobedience. His comments sparked a massive outcry from many parts of the country while others defended his right to 'free speech'.

Personally, I think the idea is bull. IQ tests are too inconlusive and culturally relevant to be used in such a way.

[Dromikaites]

This is rather topical down here in Aus at the moment. A uni academic stated that a number of African refugees should not have been gratned permanent asylum in Australia as their lower IQs would lead them to a life of crime and civil disobedience. His comments sparked a massive outcry from many parts of the country while others defended his right to 'free speech'.

Personally, I think the idea is bull. IQ tests are too inconlusive and culturally relevant to be used in such a way.

I agree with you that IQ tests are dependent of the culture but not as dependent than some people claim to be. For instance they are used the same way in China as they are used in, say, France. What was discovered in some West African countries was people there had very logical explanations for grouping some things together diferently than in the rest of the world. I'll briefly explain what has happened there in order to understand what exactly is this "cultural dependence" of the IQ tests.

When shown images of agricultural tools together with fruits and vegetables, the majority of the interviewees tried to group the tools together with the vegetables or fruits those tools were used for in agricultural works. Of course, they failed the test because not all the vegetables had the corresponding tools and some tools and/or vegetables could be paired in many ways while the respondents were told there is only one "right way" to do the grouping. After hearing the explanations of the interviewees, the researchers realised that those tests were too "westernized". As a result the tests were revised (this happened in the mid '70s).

What the IQ test measures is the ability to work with numbers, words, images and to do logical operations. A high IQ level does tell that the person can perform well tasks related to numbers and logical thinking but not everybody needs to work in jobs where numbers and profound logic is needed. That academic was idiotic in the sense that he assumed that everybody who doesn't get a job requiring high IQ levels is a potential criminal. Which would mean that any manual worker is dangerous. Unfortunately people like that academic give IQ tests a bad reputation.

[wilpuri]

hehe, this one is authored, or co-authored, by Tatu Vanhanen, Finnish Prime Minister Matti Vanhanen's father. It was conveniently pulled out by the yellow press once he became PM, the Prime Minister's father's "Race theories"!
The outcry by the press is ridiculous. Some politicians call it "embarassing". What's embarassing? It's a researched piece of work which suggests that IQ correlates with the wealth of a nation. So what?

By the way, I keep hearing about how IQ tests are culturally inclusive. Could someone give me examples?

[Dromikaites]

By the way, I keep hearing about how IQ tests are culturally inclusive. Could someone give me examples?

Here's a link to a page that gives some examples of culturally-biased questions or tasks (read the part close to the bottom) http://www.ship.edu/~cgboeree/intelligence.html

The cultural bias is very much a thing of the past if the IQ tests are selected and administered by local profesionals. Not to be confused with the some of the tests on the web or in some magazines

[Simetrical]

I agree with you that IQ tests are dependent of the culture but not as dependent than some people claim to be.

Right, but in the context of this thread, the point is that Westerners are of course more "intelligent" as measured by anything that measures abstract intelligence, because all of us practice abstract thought for over a decade in school and many of us then proceed to a job where we think abstractly all day long. As for cultural bias in measuring rather than in intelligence itself (if there's a difference), remember that we're all basically used to IQ tests and the like, having taken them throughout childhood and adolescence. This is a broad cultural bias you're not going to be able to easily eliminate when it comes to radically different cultures.

[Dromikaites]

Right, but in the context of this thread, the point is that Westerners are of course more "intelligent" as measured by anything that measures abstract intelligence, because all of us practice abstract thought for over a decade in school and many of us then proceed to a job where we think abstractly all day long. As for cultural bias in measuring rather than in intelligence itself (if there's a difference), remember that we're all basically used to IQ tests and the like, having taken them throughout childhood and adolescence. This is a broad cultural bias you're not going to be able to easily eliminate when it comes to radically different cultures.

I started this thread because I'm interested in how some Western countries seem to use their human resource better than others (this is the interpretation I give to getting a higher GDP per capita than that predicted by the average IQ). According to that study several developed Western countries like UK or Germany use their human resources in a "normal" way and as a result, their GDP per capita is according to what one would expect due to their high average IQ level. But there are other Western countries like Ireland, Belgium or Denmark, which are not rich in resources nor populous and yet they seem to make their citizens more productive than the average IQ level of those ciitizens would predict. My question is how they do it?

[Simetrical]

I started this thread because I'm interested in how some Western countries seem to use their human resource better than others (this is the interpretation I give to getting a higher GDP per capita than that predicted by the average IQ). According to that study several developed Western countries like UK or Germany use their human resources in a "normal" way and as a result, their GDP per capita is according to what one would expect due to their high average IQ level. But there are other Western countries like Ireland, Belgium or Denmark, which are not rich in resources nor populous and yet they seem to make their citizens more productive than the average IQ level of those ciitizens would predict. My question is how they do it?

Yeah, but that entire train of thought depends upon the concept that it's IQ that actually shapes GDP and not the other way around, which I don't think we can say with any confidence. I think we can say the opposite with substantially more confidence, in fact. If IQ depends on GDP, then the countries with better GDP than their IQ predicts could more appropriately be said to have worse IQ than their GDP predicts, which raises quite a different question.

[Dromikaites]

Yeah, but that entire train of thought depends upon the concept that it's IQ that actually shapes GDP and not the other way around, which I don't think we can say with any confidence. I think we can say the opposite with substantially more confidence, in fact. If IQ depends on GDP, then the countries with better GDP than their IQ predicts could more appropriately be said to have worse IQ than their GDP predicts, which raises quite a different question.

If you have a country that is quite low on natural resources and yet manages to do well I think a lot has to do with the way that country is "managed" in the broadest meaning of the word. So it has to do quite a lot with good abstract thinking not only at the governemnt level but all over the society.

[Simetrical]

But again, that's an assumption. It could just be luck or something. There are too many factors for you to be able to assign a cause so definitively.

[Dromikaites]

But again, that's an assumption. It could just be luck or something. There are too many factors for you to be able to assign a cause so definitively.

It can't be luck. The "something" is interesting though, this is why I started the thread. Looking for that something

[Simetrical]

It could be luck. Politics, I would say, is a chaotic system: sensitive to initial conditions. Just as a small atmospheric perturbation can change the course of a weather pattern, so too can a single random leader forever change the course of a nation or a continent or a world. The cause could also, of course, be a larger, systemic factor such as genetics, but it doesn't have to be.